Beepi adds online option in used auto market

Beepi.com cuts some traditional retailing steps

By Mike D. Smith

April 17, 2016

Photo: Elizabeth Conley, Staff

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****embargoed until 4/17 Bryan Barber, an inspector for Beepi, checks out the sunroof on a 2012 Jeep Cherokee on Wednesday, April 13, 2016, in Houston. Houston becomes the 16th market on Monday for Beepi.com, an online used vehicle selling and leasing business that promises inspections and a guaranteed sale in 30 days. ( Elizabeth Conley / Houston Chronicle ) less

****embargoed until 4/17 Bryan Barber, an inspector for Beepi, checks out the sunroof on a 2012 Jeep Cherokee on Wednesday, April 13, 2016, in Houston. Houston becomes the 16th market on Monday for Beepi.com, ... more

Photo: Elizabeth Conley, Staff

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****embargoed until 4/17 Bryan Barber, an inspector for Beepi, performs a multi-point inspection on a 2012 Jeep Cherokee on Wednesday, April 13, 2016, in Houston. Houston becomes the 16th market on Monday for Beepi.com, an online used vehicle selling and leasing business that promises inspections and a guaranteed sale in 30 days. ( Elizabeth Conley / Houston Chronicle ) less

****embargoed until 4/17 Bryan Barber, an inspector for Beepi, performs a multi-point inspection on a 2012 Jeep Cherokee on Wednesday, April 13, 2016, in Houston. Houston becomes the 16th market on Monday for ... more

Photo: Elizabeth Conley, Staff

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****embargoed until 4/17 Bryan Barber, an inspector for Beepi, performs a multi-point inspection on a 2012 Jeep Cherokee on Wednesday, April 13, 2016, in Houston. Houston becomes the 16th market on Monday for Beepi.com, an online used vehicle selling and leasing business that promises inspections and a guaranteed sale in 30 days. ( Elizabeth Conley / Houston Chronicle ) less

****embargoed until 4/17 Bryan Barber, an inspector for Beepi, performs a multi-point inspection on a 2012 Jeep Cherokee on Wednesday, April 13, 2016, in Houston. Houston becomes the 16th market on Monday for ... more

Photo: Elizabeth Conley, Staff

Image 4 of 8

****embargoed until 4/17 Bryan Barber, an inspector for Beepi, performs a multi-point inspection on a 2012 Jeep Cherokee in the owner's driveway on Wednesday, April 13, 2016, in Houston. Houston becomes the 16th market on Monday for Beepi.com, an online used vehicle selling and leasing business that promises inspections and a guaranteed sale in 30 days. ( Elizabeth Conley / Houston Chronicle ) less

****embargoed until 4/17 Bryan Barber, an inspector for Beepi, performs a multi-point inspection on a 2012 Jeep Cherokee in the owner's driveway on Wednesday, April 13, 2016, in Houston. Houston becomes the ... more

****embargoed until 4/17 Bryan Barber, an inspector for Beepi, performs a multi-point inspection on a 2012 Jeep Cherokee on Wednesday, April 13, 2016, in Houston. Houston becomes the 16th market on Monday for Beepi.com, an online used vehicle selling and leasing business that promises inspections and a guaranteed sale in 30 days. ( Elizabeth Conley / Houston Chronicle ) less

****embargoed until 4/17 Bryan Barber, an inspector for Beepi, performs a multi-point inspection on a 2012 Jeep Cherokee on Wednesday, April 13, 2016, in Houston. Houston becomes the 16th market on Monday for ... more

So he recently got a top-to-bottom inspection from a trained technician who photographed every detail of the SUV and offered a quote that's good for 30 days - all without leaving the driveway of his Washington Avenue-area home.

"It couldn't be more convenient than this," said Wolcott, 25, watching Bryan Barber crawl under and climb into the Jeep and peer under its hood.

Wolcott used Beepi.com, a new app- and online-based used vehicle marketplace that formally launches Monday in Houston after being piloted here for several weeks.

Beepi joins online services like Carmax and Houston-born Texas Direct Auto in using cyberspace to remove some of retailing's traditional steps.

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Houston is the 16th metro area Beepi has entered. The company already is in Dallas and Austin, and it does business in 12 other states. It's opening a warehouse facility in Houston, housing inspectors and specialists.

The idea for the company was born after now-CEO Ale Resnik bought a used Jeep that caught fire within 48 hours.

Sellers of a vehicle that is under 10 years old and has fewer than 100,000 miles can log on to the Beepi website or app, enter information about the vehicle and schedule time with an inspector. After inspection, the company offers a quote that is guaranteed for one month.

Beepi will then try to sell the vehicle at a markup and keep the difference. But even if the vehicle isn't sold within one month, the company will still honor the quoted price to the seller.

Buyers have up to 10 days to return a vehicle, no questions asked. To date, Resnik said only 3 percent of vehicles have been returned.

The goal, Resnik said, is to "build trust and eliminate friction" in auto sales by bridging what he called an information gap in used sales. Buyers and sellers, he said, often don't have access to the same information.

"We truly believe there's a transformation and disruption going on," Resnik said. "What you're seeing is a change that might very much end up terminating the car lot, (but) that's not going to happen overnight."

Consumer mentality

Kit Yarrow, a consumer psychologist with Golden Gate University, said Beepi and companies like it appeal to an emerging consumer mentality: busier people who are attracted to the ease of doing things and the assurance of a good deal.

"They thought about everything that is cumbersome in the car-buying process and said, 'We'll take care of it,' " Yarrow said of Beepi.

It's the same phenomenon that has been happening in retail as upstarts have formed as go-betweens to get everything from groceries to electronics, furniture and clothing more quickly to doorsteps.

Wolcott said assuming his experience with Beepi goes well, he'll consider it for purchases.

Texas' 1,300 franchised dealers sell about two used cars for every three new vehicles, or about 1 million used vehicles per year, Walters said. Another estimated 1.5 million are sold by private sellers.

An estimated 500,000 used vehicles are sold by independent dealers, which include non-franchised lots and online sellers.

Advantages for dealers

Online companies have changed the new and used marketplaces. Buyers seeking new vehicles can instantly check prices to help themselves bargain. Used cars, with varying wear and tear, are more differentiated.

"You can't find that exact vehicle somewhere else," Walters said. "So, used cars really help keep the dealer in business. He really can't make a profit on a new car enough to run his operation."

Walters said dealers still hold advantages. Motor vehicle tax credits for trade-ins are only available through franchised dealers. Traditional dealers also don't have to deal with delivery arrangements. They also have long-standing community roots in many cases, employing many, he said.